Thursday, September 22, 2011

A reminder: Ronald Reagan raised capital gains taxes

The Tax Reform Act of 1986 actually did two things that required the affluent to pay higher taxes: it raised the effective tax rate on long-term capital gains from 20 to 28 percent, and it eliminated the ability to write passive losses against ordinary income. This meant that after 1986, Warren Buffett's taxes would have been at least as high as his secretary's.